Dubai TV Interview, Sept 06, 2021

Speaking to Dubai TV on Monday, Mohamed Hashad, Director of Research and Development at Noor Capital, discussed the current situation across global markets, with anticipation for a number of developments over the course of the week.

the US Non-Farm Payrolls Report

The US job data had a massive impact on the markets, especially the US stock market. The sharp slowdown in US jobs has brought back fears of a hard recovery in the US economy. The Dow was down about 61 points. The S&P lost 0.11%. In addition, 11 major sectors saw declines in the NYSE with heavy selling, but what limited losses significantly is the diminishing possibility of a tapering or interest rate hike soon.

Gold

The precious metal continues to record gains for the fourth consecutive week, reaching $1,833 an ounce. Gold prices benefited from the sharp decline in the US dollar to reach its lowest level in a month and a half after disappointing US jobs data. The US economy added only 235,000 jobs versus the 750,000 expected. The continued rise of gold also depends on the repercussions of the rapid spread of the delta strain, with the extension of the state of emergency in some countries raised the demand for gold as a safe heaven.

Oil

In Hashad’s point of view, he mentioned that oil has a different path than the rest of the assets traded in the markets. Oil has gained upward momentum due to several factors such as the sharp decline in US oil inventories with OPEC+ maintaining the production at 400,000 barrels per day in addition to concerns about the oil supply on fears of Hurricane Ida, which led to the suspension of 95% of oil production in the Gulf of Mexico and oil may witness more increases in the coming period.

USD

As for the USD, Markets have been waiting for Jerome Powell’s conference in Jackson Hole for policy clues and rate hike timing. The Federal Reserve Chairman said a rate hike is unlikely until after a strong performance in the labor market. However, the jobs data was significantly lower, making the markets believe that the Fed will not taper.

Eurozone

There is a lot of data due this week that will affect the European stock markets. We await the European Central Bank and Bank of Canada decisions on interest rates and the Reserve of Australia and Canadian jobs data.